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The plaintiff publishes and sells religious! The point in all these cases is not whether books at a profit. It also furnishes such books the charity makes a profit or does not free to needy Sunday Schools. Its business make a profit, but whether the purpose showed a profit for several years. On this state | of the partirular business out of which a of facts, the Chicago assessor sought to tax the profit is sought is itself charitable. In the property of the plaintiff used in the publishing principal case the publishing, selling and distri. business. The Supreme Court, in setting aside bution of religious literature was in itself a a decision of the Board of Review upholding charity, just as night schools or hospital acsuch tax, says:

commodations in connection with charities, and

designed in itself to be part of the charity, and "The object of selling books and supplies is not to make money, but is to promote the re

not merely to contribute means to further the ligious, charitable and beneficent purposes of

charity, are themselves charitable and exempt appellant by disseminating the teachings of its from taxation. books and periodicals. The purpose of the soci. ety is accomplished by the effect on the minds and lives of the children and adults who read and study its books and periodicals. The work of appellant is to send its workers and mission

RAILROAD LEGISLATION AS DEaries into those parts of our land where religious teaching among the young has been neg. VELOPED UP TO DATE. lected, and there to take the young into Sunday schools for moral and religious instruction and provide for them wholesome literature. Many It seems useful to take stock at this time of these books are suitable for the use of adults,

of the progress made by the present Conand the society seeks to supply needs of individuals and families by gift where that is neces gress during its first session toward the ensary, but by a sale whenever a sale is prac

actment of legislation necessary to meet the ticable. The price received, whatever it may be, makes a gift to needy persons possible to railroad emergency. The controlling nethe amount so received beyond what the soci. cessity for additional railroad legislation is ety could otherwise give. It is not the use to be made of the profits but the nature of the

to re-establish railroad credit, which failed business done that is to be considered in decid even before the war under the system of ing the question of liability to taxation. We have already pointed out the purposes for which

regulation in force, and to save from bankthis society was organized and the fourfold na. ruptcy and ruin many, and perhaps most, ture of its business. Sales of publications made

of the railroads of the country because of by this society, whether at a profit, at actual cost, or half cost, are in aid of the gratuitous the extraordinary increases in wages and in distribution of the same publications among

prices of fuel and other materials during those who are unable to buy them."

federal control. Unless railroad credit is reThere have been many recent decisions which have correctly held that a charity is properly

established, it will be impossible for the taxed on property used strictly for commercial | railroads to reasonably keep pace with the purposes and that it is no ground for exemption growth of the country or to finance any that the profits of the business are applied to

substantial part of their requirements for charitable purposes. Stahl v. Kansas Educa.

extensions and betterments, generally estitional Ass'n, 54 Kan. 542, 38 Pac. 796; City of

mated at one billion dollars annually. Let New Orleans v: St. Patrick's Hall Ass'n, 28 La. Ann. 512; Ridgeley Lodge v. Redus, 78 Miss.

us therefore examine what Congress has 352, 29 So. 163; Parker v. Quinn, 23 Utah 332, proposed to date, and determine how far it 64 Pac. 961; Trustees of the Academy of Rich | meets this fundamental necessity, and what mond County v. Bohler, 80 Ga. 159, 7 S. E. 633; the country faces if these proposals are Young Men's Christian Ass'n v. Douglas County,

really as far as Congress means to go in 60 Neb. 642, 83 N. W, 924, 52 L, R. A. 123. .

solving the railroad problem. The First Methodist Church of Chicago owns a very valuable property in the very heart of Both the Senate Committee on Interstate this great city. They use the third floor for Commerce, of which Senator Cummins is church purposes and lease the other floors. The chairman, and the House Committee, of rental is applied altogether to the purposes of

which Mr. Esch is chairman, have presentreligion; yet the Supreme Court of Illinois has

ed bills designed to embrace all the legislaheld that the part of the building used for

| tion they deem necessary upon the subject. profit should be taxed. First Methodist Church v. City of Chicago, 26 Ill. 482.

| The Esch bill, after many amendments in

open session of the House, was passed by But it is still a single Commission. And, that body and has gone to the Senate. The though its membership be increased and it Senate did not consider either bill during divide itself into sections, it remains a single the first session, but has taken up the sub- body, governed by the same semi-judicial ject in the session which has just convened. rules of procedure and methods, and with If the usual course is followed, it will sub- the same diffused and all-embracing duties, stitute its own bill for the House bill, and, many of which are in no wise related and after extended debate and probably amend require wholly different experience and talments, it will pass its bill, and the differ- ents and methods for their correct solution. ences between the two measures will be It is obvious that the Commission must emworked out in conference.

ploy subordinates, not merely to assist, but

actually to decide and dispose of many of THE ESCH BILL IN THE HOUSE.

its important duties; and the bill authorizes The Esch bill as amended and passed by it to do this and the Commission has been the House contains the following discourag doing it heretofore of necessity, even with ing features:

its present duties. This is one of its de1. The first and fundamental objection is

fects. It is not right to put the practical that it bases its whole scheme of relief upon

decision of questions of such vast public the Interstate Commerce Commission. It

importance upon subordinates of the Comimposes upon the already overburdened

mission who are unknown, who get no Commission the performance of many new

credit or recognition for what they do, who duties and the administration of many new

hold their places at the pleasure of the Comregulations. It creates no new agencies to

mission, and who receive salaries insuffiassist the Commission in rate matters, such

cient, without any certainty of tenure of as Regional Commissions; and it leaves the

office, to command the ability and experiCommission still burdened with the admin

ence that ought to be brought to bear in the istration of the Car Service Act, the Act

decision of such questions. No reflection Relating to the Construction and Operation

upon the subordinates of the Commission is of Switch and Sidetrack Connections, the

intended, for. I believe them to be, indiAct of August 24, 1912, the Safety Appli

vidually and as a class, quite equal in abilance Acts of March 2, 1893, the Act of May

ity and character, to any other men in simi6, 1910, relating to railroad accidents, the

lar lines of work. But my point is that the Safety Act of February 23, 1905, the Hours

system is not calculated to produce the of Service Act of March 4, 1907, the

wisest decisions, and that decisions by even Safety Act of May 30, 1908, the Act Relat

the best of men in such subordinate, preing to the Transportation of Explosives,

carious, underpaid and unrecognized posiapproved March 4, 1909, the Boiler Inspec

tions would be unsatisfactory as a rule. tion Act of February 17, 1911, the Act Re

All experience suggests that Regional lating to Block Signal Systems and Appli Commissions and administrative Boards for ances, approved June 30, 1906, and many administrative duties, composed of memother duties of an administrative character bers appointed by the President and conhaving nothing to do with rates, which firmed by the Senate, for definite terms, and could be better performed by a smaller receiving fixed salaries, would be better board-leaving the Commission free to de suited to decide and dispose, subject to revote its time and talents to the making of view by the main Commission in rate cases, rates and to the hearing and determining of all these important questions, and be more rate cases and other important controver- | in keeping with our traditions and ideals. sies. The bill adds two new members to The Interstate Commerce Commission must the Commission, it is true, making the mem- | either leave wholly and entirely to subordibership eleven instead of nine as at present. nates the final decision and disposition of a

great multitude of important matters, or it | repair the ravages of winter and to prepare must devote to the review and revision of for the heavy traffic of the late summer and the conclusions of its subordinates an autumn. As a result, many railroads have amount of time that will be seriously need deficits for the first six months of the year. ed for rate questions and controversies and Hence I say the "guaranty" tendered by the its more important work. Delay in rate Esch bill, as passed by the House, fails to making and revision and in the decision of meet the emergency which it recognizes and rate questions is deadly to railroad and assumes to provide for. commercial interests alike. It has been a 3. The provision of the Esch bill as great evil in the performances of the Inter- amended by the House with respect to the state Commerce Commission in the past, / funding of amounts charged by the Governand with the additional duties imposed by ment to the railroad companies for addıthe Esch bill it will, in my judgment, be tions and betterments made during federal come intolerable.

control is a serious menace to the credit oi 2. The Esch bill, as introduced and as

companies without great financial resources amended and passed by the House, recog.

and strength. It requires that the amount nizes that the revenues from existing rates

due from the Government to any company, remaining after the payment of wages and

even for rental, shall be set off against other operating expenses will be insufficient,

amounts incurred for additions and betterdue to conditions arising during federal

ments made during federal control and control and still existing, to save many of

chargeable to capital account, to the extent the railroads from bankruptcy and to con

permitted under the standard contract beserve the credit of the others. It therefore

tween such company and the United States provides a guaranty for a period of six

relative to deductions from compensation. months after federal control. But this

Any balance due by the company with re"guaranty” is illusory if not worthless. It

spect to additions and betterments may be does not provide, as one would suppose,

funded into not exceeding ten equal that one-half of the "standard return” for

amounts, one of such amounts to be payable twelve months now paid shall be guaranteed annually beginning at the expiration of five the companies for the period of six months,

years from the termination of federal co:but provides instead that the guaranty to

trol, with interest at the rate of 6 per cent each company shall be the average of the

per annum from date, subject to the right corresponding periods of six months during

of the carrier to pay before maturity. Any the test period. That is to say, assuming

other indebtedness existing at final settlethat federal control terminates December

ment shall be evidenced by notes payable on 31st, as now believed, the bill provides that demand with interest at the rate of 6 per the average net earnings during the test cent per annum and secured by such colperiod for the six months from January to

lateral as the Government may require. No June, inclusive, rather than one-half of the

progressive railroad company in a growing earnings for the whole year, shall be taken. country such as ours can pay for its addiNow we know that the first six months of tions and betterments out of earnings, as the calendar year are the worst for the rail this act thus requires. Such expenditures roads. The crops have been moved and the are for capital account, and as such must, traffic is light, and during the three winter to a great extent if not entirely, be provided months of January, February and March for by the issue of capital securities. Furthe snows are heaviest, the weather gen thermore, the bill provides that even the erally is the worst and the operating diffi balance which the Government cannot colculties are the greatest of the year, while in lect by setting off the rental because of the the spring months of April, May and June restrictions in the standard contract, shall thie maintenance work is actively resumed to be funded for only five years and shall be thereafter payable in annual instalments, | As reported by the committee, the bill conprovided the company is able to give good tained an elaborate provision for a "Railsecurity, which many of them cannot do. way Labor Adjustment Board" and a Funding for five years, it is true, allows a “Railway Board of Labor Appeals" for breathing spell, but the requirement that hearing labor disputes, but no means were the amounts shall be paid in ten annual in provided for enforcing such decisions. stalments thereafter is a method which only

Where a contract existed, it was provided financially strong companies can avail of,

that the railroad company and the unions and probably will have to be taken care of

respectively and members advising should out of current income.

be liable in damages and civil actions for

violation of such contract. But this would When it is considered that the additions

simply discourage or prevent the making of and betterments were ordered by the Gov

wage contracts. Strikes and lockouts were ernment, and many of them to meet the

not made unlawful, and no penalties were emergencies of the war, and especially prescribed therefor. But even this "milk when there is considered the very liberal and water” provision called forth the usual treatment accorded by the Government to denunciation from the union leaders, and war industries with respects to improve when the bill came up in the House a strictments, it would seem not unreasonable to

ly union labor amendment was adopted by allow the railroads which need the indulg-a vote of 161 for to 108 against. The bill ence a long term in which to pay the capital

| as thus amended and passed recognizes the expenditures charged against them by the

various railroad brotherhoods and unions Government while under federal control.

by name and provides for Boards of AdThe provision leaves the railroad companies

justment composed equally of representawithout a dollar of working capital, with a

tives of such unions and of the railroad large indebtedness to the Government for

companies, but makes no provision for enequipment and for additions and better

forcement of the decisions of such boards ments ordered and made by the Govern

or for the decision of cases, of which there ment during federal control, with an in

must be many, where the equally divided creased pay roll of over a billion dollars a

Board cannot agree; and it does not proyear added during federal control, confront

hibit or in any wise discourage strikes. But ing a scale of prices for fuel and other ma

the most remarkable provision is that the terials comparable with the increased cost

act as thus amended makes every decision of living for individuals, and with a rate

of the United States Railroad Administraincrease insufficient to save the Government

tion or of the Commission of Eight permaitself from a huge deficit in its own opera

nent, for it says all such decisions tion of the railroads. Such a refunding provision certainly does not tend to the | "affecting question of wages, hours of servenhancement and re-establishment of rail ice or conditions of employment are hereby road credit.

confirmed and shall apply to all carrier

lines subject to this act. Decisions which 4. But the most amazing provision of the have been rendered by the United States Esch bill as amended by the House is that | Railroad Administration and which apply with respect to labor. It effectually per to the individual carriers subject to the propetuates every wage increase and every

visions of this act shall remain in effect

until superseded by mutual agreement beworking rule or regulation made by the

tween the carrier and the employes or by Railroad Administration under the stress of

decision" the world war and the abnormal conditions resulting therefrom, no matter how radi- of one of the Adjustment Boards created cally conditions may change nor how soon by the act. Of course, this provision means normal conditions of living may be restored. I that no change can ever be made except in

the way of further wage increases, since the the merit at least of recognizing the facts requisite “mutual consent" to a reduction of the railroad situation and the courage or modification will not be given by the of grappling with them in an honest attempt unions, and will not be superseded” by the to solve the problem. It recognizes that Adjustment Boards, since under the act the the Interstate Commerce Commission is unions have one-half the membership of overburdened now with duties that intereach board. The same provision exists with fere with its more important work of makrespect to the Adamson Eight-Hour Law. ing and revising rates and deciding rate I am not advocating a reduction of wages controversies. The bill, therefore, relieves at this time or any change in working rules the Commission of various administrative and regulations, although some of them are | duties with respect to other matters which absurdly unjust to the railroads and to the can be as well or better performed by some people who pay the freight bills.

other board, and confers upon it additional

duties of a much more important character But it is almost unbelievable that the

| and provides it with the assistance necesHouse realized that by adopting this amendment it would saddle upon the country by

sary for the proper performance thereof. law the railroad wage scales and working i

The bill also recognizes for the first time

in our congressional legislation the responrules established under the stress of war

sibility of the Federal Government to create and at a time when the cost of living and the profits of labor both were above any

some agency charged with the duty of pro

moting the establishment of adequate railthing known for generations, and enforce

road facilities requiring it to keep an eye the same by the penalties prescribed in the act, while prescribing no penalties for

on transportation service and find out what strikes. Legislation of this sort is not likely

is necessary to provide that which is needed,

and co-operate with the railroads and the to attract investors to railroad securities or

Commission in bringing it about. The bill to inspire much confidence in the future

creates a Transportation Board composed provision of the transportation facilities

of five members to be appointed by the which the country will need.

President with the consent of the Senate, The Esch bill as passed by the House and charges it with the duties just mencontains other provisions that will not be tioned, and transfers to it the various adhelpful, though less objectionable; some ministrative duties with which the Interthat seem merely formal and of no particu-1 state Commerce Commission is now burlar consequence; and some that undoubt- i dened with respect to the Car Service Act, edly are wise, as, for example, giving the the Safety Appliance Acts, the Railroad federal government exclusive regulation of Accidents Act, the Hours of Service Act, the issue of railroad securities. But I com the Act Relating to the Transportation of ment only on those which in my judgment

Explosives, the Boiler Inspection Act, the tend to defeat what I conceive to be the Automatic Signal Act and other acts remain object and reason for any legislation ferred to above. The bill also recognizes by Congress at this time, namely, the re the danger to the whole people in the power establishment of railroad credit to the ex of four men, whoever they may be and howtent necessary to enable the railroads to ob- ever wise, who lead the trainmen's brothtain the means required to provide the erhoods, armed with a strike vote given transportation facilities which the country ! merely to support them in negotiations, to must have.

tie up the railroad transportation of the

country and to throttle the life of the naTHE CUMMINS BILL.

i tion. The bill therefore provides means for The bill introduced by Senator Cummins promoting the just settlement of all railand reported by the Senate Committee has 'road labor disputes through tribunals cre

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